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fiscal roadblock? what traders tell us. in today's cover story, a preview of the economy in 2013. the amount of optimisim just may surprise you. plus, how sex appeal is killing the allure of certain retailers. what's on the menu for this stock market darling? and, its the end of the world as we know it. why some businesses feel fine. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, december 21st. i'm angela miles, and we survived the mayan calander prediction! in today's first look: standout stocks: research in motion had wild rides last night. rim shares bounced nearly 7% after reporting a profit that surprised analysts, then sold off on word of
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declining blackberry sales in the u.s. nike stock jumped 6% higher after exceeding earnings expectations and revealing orders were up 6% in the quarter. now on to the market, which also gained ground yesterday on optimism a budget deal will emerge out of washington. meanwhile, the sleepless in america are creating a boost in business. consumers spending on treatments for insomnia shot up from $24 billion 4 years ago to $32 billion now. fortunately, it's a bumper year for the coffee crop in brazil. the country is harvesting its biggest coffee crop ever. and peter madoff is sentenced to the max of 10 years in prison for helping his brother bernie in their infamous ponzi scheme. scott bauer of trading advantage joins us on this friday morning for a closer look at the markets. good morning to you. we had a nice santa claus rally going on here. do you think
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that this fiscal talk is just going to kill it? > > no, it doesn't look like it. the trend over the last few days is, we have seen the market up, but we have seen it really kind of accelerate toward the end of the day. so, as news has not come out negatively, people are buying into the market. but what is interesting is, we have seen the vix, or volatility index, the protection of the market, also rise over the last three or four days, and rise fairly significantly. what that tells me is, the people that are still in the market, that have not sold their long positions due to capital gains tax or dividends tax or anything like that, they want and should protect themselves. that is why we have seen the vix rise over the last few days, in addition to the market. > scott, what do you think about this deal of the icy buying of the new york stock exchange? what does it mean to traders?
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> > probably not much to traders. they are going to have more access to the electronic world. everything is still going to be based out of new york. obviously behind-the- scenes though, what we are going to see is probably, unfortunately, some staffing cuts. and that is, again, not really from the trader's side, but that is the support staff and all sorts of people. anytime you see any sort of big consolidation like we are going to see here, that has got to be the thing to go. > what do you suspect will happen with volumes today as traders head home for the holidays? will research in motion be the play on the day? > > last night they reported - i don't want to say blow-out earnings - but going into the release of 10 in a couple months, they reported much- better-than-expected earnings. so, the continuation, the momentum to the upside, is still there for rim. that is going to lead - not just the market - that is going to lead that sector. rim is back in play. now, for the rest of the marketplace, i think you are going to see more of the same today. you're going to see more buying, probably see the volatility index either remain here, possibly trend higher going into the weekend. > good to have you on the show. that is scott bauer of trading
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advantage. happy holidays scott. > > same to you angie. with no presidential election, no stimulus programs on the horizon and healthcare reform upheld, 2013 should be smooth sailing for the economy, right? to almost no one's surprise, it's not that simple. despite that, in our cover story, we found a few people willing to stick their necks out and share with us their predictions. most everyone we found had reason for measured optimism. housing prices, for example, are going up. "there's hope that you can climb out. that's just a game- changer." and that opens up housing- related investment, which in turn may help stocks. "i see certain sectors helping the stock market. i see that true of the housing sector." "look at real estate, look at building supplies, things that have been down in the past." as for jobs, john challenger says though the economy has been adding an average of 150,000 jobs a month, we may not need that many to make unemployment itself go down. the reason -
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baby boomers. "there are many more baby boomers retiring, so we don't need nearly as many new jobs as we did a decade ago." as for overseas trade, china's economy is predicted to grow at 7%. it used to be 15%. "hu jintao's approach was 'build the middle class.' i don't know if the next leader will make that his goal." and in europe, observers think the worst is over, but the first half of the year will be slow. "they're going to make progress, but not enough to change much. what they need is private equity, private investment." finally, investing in community or regional banks - an alternative that may surprise you. "you can invest in small banks and help your community. if enough people do that, the country will improve." lastly, financial analysts say the ipo calendar will be worth tracking in 2013. with roughly 150 private companies ready to
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make their initial public offerings, more than in each of the last two years. a possible strike that would hit ports stretching from massachusetts to texas could have a ripple effect on the national and global economy. just days after a west coast port strike was resolved, this new walkout is being threatened by nearly 15,000 longshoremen union members who are upset over wages and royalty payments. the strike would cripple 15 different ports. the union did not answer our calls, but the national retail federation says the walkout would cause a national economic emergency, and urges president obama to use "all means necessary" to prevent a strike. "we thnk the ripple effect would be fairly significant. all
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the industries that rely on parts, both importers and exporters, manufacturers, farmers, truckers, rail, you name it, all rely on the ports to move the nation's and global commerce." that was jonathan gold, vp of the national retail federation. the current contract expires at midnight on december 29th. lawmakers remain divided today over a deal to avert going over the fiscal cliff. last night, the house passed legislation known as plan b, which raises taxes on americans earning $1 million. senate democrats threatened to squash the bill, and the president has promised a veto. "senate democrats and the white house will have to act on this measure. two years ago, 53 democrats voted for a bill like this one. now they say they oppose it. rather than tell us what they can't do, maybe they should tell us what they can do." last night, lawmakers failed to vote on legislation known as plan b. it called for raising taxes on americans earning $1 million dollars. the presdient wants to hike taxes on people earning $400,000, along with spending cuts. traders will be anxious to see where herbalife stock opens this morning. shares have fallen dramatically this week. bill ackman of hedge fund pershing square called the nutrition company a pyramid scheme and presented reasons why he's shorting the stock. michael johnson, the ceo of rbalife, issued a statement denying herbalife's business model is built on a pyramid scheme. johnson is also asking the sec to investigate extraordinary put options buying the stock
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that expire tomorrow. puts are bets the stock is more likely to go down than up. it was a slippery second quarter for darden and scholastic. earnings disappointed at both companies. at darden, income fell by 37%. last month darden, which runs olive garden and red lobster, faced pushback after its ceo said it would hire more part- time employees due to the expense of health care reform. superstorm sandy and failed promotions also hurt profits. meanwhile, at publisher scholastic, profits are down 25% after disappointing sales of the book turned movie "the hunger games." the company said it will freeze hiring as part of an overall effort to save 20 to 30 million dollars. a picture perfect problem for popular instagram. the photo sharing tool recently revealed a change in its privacy policy allowing it to use the public's photos for financial gain in ads. kardashian is among a slew of celebrities who say they
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will drop the service if instagram doesn't change that policy stat. a new bump in the road for toyota. two different 2013 models, the flagship camry sedan and the prius v wagon, failed an important crash test adminstered by the insurance institute for highway safety. it's one more setback for the car giant in a year that has seen it pay out record fines for safety violations. toyota has recalled more than 14 million vehicles over the last several years due to safety concerns. the mayan calendar prediciton that today could be the end of the world as we know it is
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causing a spike in business. companies are seeing strong sales of survival packs that include a gas mask, duct tape, matches and ready-to-eat meals. generators are another hot seller. tgi friday's is said to be offering mayan margaritas at a discount. still to come, the government is driving away from gm. what that means for buying auto stocks - that's later in traders unplugged. but first, why "sexy stocks" might be losing their allure with investors. that's next.
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when it comes to stock picking, you might want to consider this: sex does not always sell. margaret bogenreef of joins us on set this morning. good morning to you. > > good morning to you. > so there are some retailers that do tend to rely heavily on sex appeal. let's take a look at a couple of names, including abercrombie and fitch. is this a stock worth owning, or what do you think? > > no, absolutely not. abercrombie's issues are a couple-fold. first of all, when
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they came out in the mid-90's with their sex appeal and all of those nearly pornographic ads, it was a big deal. it got a lot of press, it really hit at a good time. you hit generation x and y looking to buy $30 t- shirts and sexy bags. that time is over. with the revolution of fast fashion, the h&ms and the zaras, getting those kind of headlines doesn't necessarily translate to sales anymore, and that is what you're starting to see. > so it's more about the fashion, not so much- > > -about the marketing. yeah. i think that is part of it, and i think also during this time - we are in, essentially, a global recession. you have $10 t-shirts. abercrombie and fitch is selling $30 t-shirts. and having sexy ads doesn't necessarily translate. > american apparel comes to
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mind. this is a company that has relied on that. i think that is a fair statement to say. edgy ads. > > exactly. again, i think american apparel is another example of edgy ads, lots of press, too expensive merchandise. i mean, the land grab for all those sexy ads and all that print, it is over now. no one wants to pay $30 for a t-shirt. secondly, their ceo is kind of a mess, in terms of not just sexy ads, but he has gotten a lot of bad press, and i think that is hurting them as well. > now companies such as sears and kohl's, they're a bit more watered-down, shall we say. but of course at sears you have kardashian, and then at kohl's you have j. lo. > > right. i think, again, sex doesn't always sell. if you look of those companies traditionally, they were more family retailers. you took your kids there. i wouldn't want to
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take my daughter there. i mean, you go to kohl's because you want to get some good back-to- school clothes, some good stuff for around the house, quality, middle american values. now j.c. penney is another one, they are literally selling snake- print thongs. i mean, i wouldn't want to bring my family there. > a little much. now you are an actual consultant, or you have been in another life. you did turn-arounds. so what would you tell these companies? what do they need to know? > > i think in terms of the advertising and how they relate to their consumer, know your consumer. don't follow other people. if you look at sears and you look at kohl's, they had a really good customer base. kohl's in particular could really be making a lot of money right now given j.c. penney and sears' kind of retraction. the problem is, they are looking at what is working for other retailers and trying to make it work for theand trying to be edgy. sometimes you have to look at who your customer is, and not who you want them to be. > good to have you on the show. that is margaret bogenreef. let's clean it up this christmas. > > definitely. thanks. still ahead, a former mc-market winner. a look at what happened next in traders unplugged.
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before taking off for the holiday weekend, we have a couple of traders standing by with parting shots. joining us from the floor of the cme, pro traders alan knuckman and andrew keene. good to see you guys. ready, set - round one: mc- recovery. one of the best stocks of 2011, mcdonald's, stalled this year. are you lovin' or hating it? > > i'm hitting it. i will tell you three reasons why i don't like mcdonald's: number one, they have currency problems. they can't convert their money back to the u.s.
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> > you can hedge it. > > ok, have they been able to hedge it? > > you can hedge it. i'm not saying they did. ok, what's the second one? > > the second one, increased competition. you loved yum! brands. that's huge competition against mcdonald's. > > it's mcdonald's! you can only get a mcrib at mcdonald's. what's number three? > > number three is their dollar menu is hurting their profit margin. > > i think there is going to be a global recovery, and i think more people are going to be utilizing mcdonald's, particularly after everyone was so concerned about the europe slowdown this year. that hasn't happened. the euro is surging back. this was a top-five stock in the dow two years in a row before this year. > > two years ago! 2011. we're not in 2011 anymore. > round two: saxo bank is out with its crazy calls for 2013. they're known for their outrageous predictions, such as gold at $1,200. they say that the german dax will plunge by 33%. crude oil will be at $50. will any of these predictions come true? > > this is right in your wheelhouse. this is your doom
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and gloom. this is got to be you. > > that's right, this is my doom and gloom. i am going to take that gold prediction, and i am going to take out a one and add a zero to the end and make gold $2,000 in 2013. that is my outlandish prediction. i think short-term, gold looks been selling off. however, everybody is going to need gold. they are going to run for guns and gold once we go through a huge recession next year. alan knows it. mr. bull over here. big recession. obama cannot stop spending money. > > actually there is one prediction here that does make sense to me. looking at the green markets, we're at $14 in soybeans right now. they are looking for a 50% increase. $21 is not out of the range of possibility. > > that is possible. > > with $17 highs that we've seen, we have seen no moisture. this is the latest snowfall in chicago history. so it could be a tough winter, a tough springtime for the green market with no moisture in the soil. > all right, round three: the government is making money. ungovernment motors - the treasury is selling off its gm position. which car company is the better buy now, gm or tesla? > > tesla? do you know their forward p is about 230? that stock is going to go out of business with first solar. it is just a race to see who will go out of business first. > > it looks like it is going to go up to 44, which- > > it is a huge short interest, but it is eventually going to go out of business. this solar cannot last.
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> > let's talk about gm. > > i don't like gm at all, i like ford. but you look at november car sales, they were terrible. > > the burden is over. > > the burden is over, but look at their november car sales, they were terrible. ford had real good november car sales. gm had terrible car sales in november. > > what do you ask for for the holidays from santa? does he tell you you're bad- > > coal. coal and gold. > > you are just no fun. > all right, let's move on to bonus round: what is the largest note produced today? is it $1,000, $500, or a $100 bill? > > $1,000. > > it's a zimbabwe billion- dollar note. > > i have one of those in my office. > it's $100. > > really? > yes! they don't do the $500 and $1000 anymore. and i've seen you carry around a few $100s, andrew, by the way. > > someone loaned them to him. > > alan did. > thanks for being on the show guys. happy holidays! don't go away. chart talk is next, right after this.
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that music puts you in a good mood. let's talk now to trader dan deming of stutland equities about this crazy market dan. > > for sure angie.
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> i feel like investors are confused, washington is confused. is the market confused as well? > > the market is having some difficulty kind of interpreting what is going on in washington, let alone the economy and what the impact is really going to be. i think that is the key right now. the market's reacted very positively overall to this potential resolution of the fiscal cliff. but, if you think about it on its surface, whatever the resolution is going to be, it's not going to be particularly good for the economy, at least probably over the next year or so. so, nonetheless, the market still feels that any resolution will give the ability for this market to continue to push higher based on reaction we are seeing in the market. however, i do want to add one caveat to that, which is over the course of the last couple days we have seen the vix actually creeping up as well. so now you are seeing volatility expectations creeping up in december. that is very unusual, even though the market is near the highs of the year. > dan, are you seeing any pockets of strength out there? real strength? > > yeah, you know, there are
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some areas out there. of course, right now the xlf would be the area you have to look at probably as one of the hottest areas. the banking sector is very strong going into the end of this year, and the xlf is pushing out now to new highs for the year. > good to have you on the show. i will leave you on that happy note, and happy holidays to you. have a good weekend. > > thanks angie. you too. that's all the time we have for today. coming up next week: damage control. we will count down the top cases of corporate crisis in 2012. from all of us at first business, happy holidays!
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san francisco international airport prepares for one of the busiest travel days of the year. wet windsy weather across the bay area. today marks one week since the deadly connecticut school shooting. special prayer remembrance planned online. good morning, everybody it's friday december 21st i'm brian flores. pam cook has the morning off. the rain, the wind, the cold is on the way here. >> it's al

First Business
FOX December 21, 2012 4:00am-4:30am PST

Movie and Money News/Business. Angie Miles. (2012) The economy's effect on the movie industry. New. (CC) (Stereo)

TOPIC FREQUENCY Us 6, Gm 5, Sears 4, Kohl 3, Angie 3, Mcdonald 3, Washington 3, Margaret Bogenreef 2, Toyota 2, Obama 2, Scott Bauer 2, Darden 2, Abercrombie 2, J.c. Penney 2, U.s. 2, Kardashian 2, Europe 2, Herbalife 2, New York 2, Margaritas 1
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Duration 00:29:59
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Pixel width 704
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Audio/Visual sound, color

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